Introduction
What kind of parent are you?
*Will you be chill and go with the flow when you are all set to welcome a baby in a few months?
Or,
*Will you try to scale up your income sources and look for alternatives to secure your child’s future?
We believe that every parent would want to earn and save as much as possible for their children so that they can stand firm even when they are confronted with unexpected economic buffers.
Everyone says to be positive and have an optimistic look towards the future. But when it comes to children, parents turn out to be more cautious and prepared for the worst so that their child doesn’t suffer towards the end.
This blog will help you in understanding,
- What is a child life insurance plan?
- What are the benefits of child insurance?
- What are the best child insurance plans in India?
What is a Child Life Insurance Plan?
Like a unit-linked insurance plan acts as dual-purpose insurance, a child insurance plan also comes with a dual benefit factor of investment and insurance. It is a perfect tool that helps the parent curate a safety net for their children even when they won’t be there to witness the significant achievements of their child.
The parents buy child insurance to have some substantial savings in their reserve to attain their child’s future objectives such as – education, higher education, and marriage. And all these factors come with a pretty pricey tag that can go up to two-digit lakhs.
While you are building the corpus to achieve your ambitions for your child, an insurance plan serves as a safety net in the event of your untimely death as well.
In a child insurance plan, when the life insured (parent) meets with death, the death benefit is provided to the beneficiary (child), and all the future premiums shall be waived off. This money will help your child survive and accomplish their dreams with the availed sum assured from the insurance.
Child insurance is a broad category that includes other specially tailored sub-products such as child education plans, child ULIP, single premium child plans, and many more. And, if you as a responsible parent own one of these, then stay rest assured for your child’s future as this plan has its back.
Benefits of Child Life Insurance Policy
After understanding the basic definition of child life insurance, let us go through the list of benefits associated with this insurance, and they are as follows:
It helps in supporting your child’s higher education
Child insurance acts as perfect collateral for your child’s higher education. With education inflation soaring over 10% – 12%, the price of achieving a master’s or any other higher degree has become costly.
There is no shying away from double-digit lakhs for education in India or abroad. It is where parents think of buying a loan, and a child insurance plan serves as an apt tool for child-related loans.
Care-taker even after parents death
If the life insured (parent) faces an untimely death when the policy is active, the insurer shall pay the death benefit to the beneficiary (child), and the future premiums shall be waived off.
Apart from that, this kind of insurance comes with a maturity benefit. Under this benefit, as the plan matures, the child will be entitled to receive the guaranteed maturity benefit that will help them reap the benefit of the premiums paid by their parents.
Tax Benefits:
Section 80C: Under this Sec of the Income Tax Act 1961, the life is eligible to claim a tax deduction of over 1 lakh and 1.5 lakhs for your child’s education fees and their taxable income.
Section 10(10D): As per this Sec, the benefits such as – death benefit, maturity benefit, and income benefit are free from tax.
Sec 80DD: Here, if the child of the life insured suffers from any critical illness or is specially-abled in any manner, they are liable to a tax deduction of 33% for their child’s treatment. And claim deductions of over 40% and 80% for expenses linked to minor and severe disability, respectively.
Section 80E: The benefit under this Sec of the Income Tax Act is that the interest spent on a loan your child’s higher education is exempted from tax.
Relief for Your Child’s Medical Needs: With a good child insurance plan, you get an opportunity to withdraw the money (when the plan is active) to cover your child’s medical expenses if there is any medical emergency.
Riders: There are additional perks that come at a nominal price. If you are a responsible parent, you will want to include this in your child insurance plan to make it more secure from every possible tangent. Therefore, in a child insurance plan, you can get riders for – critical illness, hospital cover, accidental death, and many more (based on the plan provided by the insurance company).
Things to Consider while Buying Child Life Insurance
After understanding the basics of a child insurance plan, let us know about the essential factors that a parent must consider while purchasing a child life insurance. They are as follows:
Mind the Coverage you Take: The coverage can be influenced by certain factors such as – age, annual earning, and lifestyle behaviors. Therefore, look for the best possible plans available in the market that offers a comprehensive deal at a
Policy Duration: Would you invest seven years on the plan and expect the best out of it? No, right. It is why selecting the most extended plan with good coverage is essential to make the best of it. It will be the only way to ensure that your child leads an economically peaceful life.
The Benefits of Rider: Riders can also be tagged as additional benefits at extra cost. Therefore, the life insured should first look through the extra benefits given by the insurance company. They are vital as they can cover real-life emergencies such as unforeseen injury and death, critical illness, and many more.
Maturity Benefits: This benefit is paid out when the term plan ends. It is why the sum assured (coverage) matters because this money matters. Select wisely because it is ultimately for your child’s progressive future.
Settlement History of Claims: One buys an insurance plan to safeguard their future objectives, and for that, you would need money from the insurance company as promised. Therefore, you should investigate the company’s claim payment policy to double-check whether your premiums and dreams are taken care at the best possible manner.
Best Child Insurance Plan in India
Will you go for any available child insurance plan or believe in doing some extensive research?
To those who belong to the latter section, continue to read because we have brought you some of the best-filtered child insurance plans for you:
Aditya Birla Sun Life Insurance Child Future Assured Plan
Guaranteed Benefit: This plan helps the life insured support their child with two major stepping stones in life: marriage and education. Here, you also have the option to opt for both. This assured benefit comes with three alternatives, and they are:
- Education Milestone Benefit
- Marriage Milestone Benefit
- Education and Marriage Milestone Benefit
Loyalty Additions: As a responsible insured, if you manage to pay all required premiums, you will be eligible to receive a 20% loyalty addition over assured benefits towards the conclusion of each periodic payout.
Maturity Benefit: This is the guaranteed amount that will be paid towards the end of the term plan.
Enhanced Insurance Coverage: This is about paying an extra premium. The life insured can choose to pay an additional premium to get enhanced insurance coverage equal to 50%, 100%, or 200% of the opted sum assured.
Riders: These are certainly added perks you can club with your existing child insurance plan to make it a more secure and inclusive bubble for your child, and they are as follows:
- ABSLI Accidental Death and Disability Rider
- ABSLI Critical Illness Rider
- ABSLI Surgical Care Rider
- ABSLI Hospital Care Rider
- ABSLI Waiver of Premium
- ABSLI Accidental Death Benefit Rider Plus
To know more about this child insurance plan, click – ABSLI Child Future Assured Plan.
Aditya Birla Sun Life Insurance Vision Star Plan
Death Benefit: Here, the beneficiary shall receive the death benefit if the policyholder passes away when the term plan is active. Once the insurance company settles the payment, the plan is called off.
Assured Payout: Beginning in the fifth year after the premium-paying term has ended, the life insured will begin receiving assured payouts (a predetermined fraction of the selected sum guaranteed).
Maturity Benefit: If everything goes well and the policyholder saturates the term plan, then the insurance company shall pay the earned bonus plus terminal bonus (if any).
Riders: The additional perks included in this plan are:
- ABSLI Accidental Death and Disability Rider
- ABSLI Critical Illness Rider
- ABSLI Surgical Care Rider
- ABSLI Hospital Care Rider
- ABSLI Waiver of Premium Rider
- ABSLI Accidental Death Benefit Rider Plus
To know more, click – ABSLI Vision Star Plan.
Conclusion
Indian education inflation has no chill, and you will not want your child to limit their dreams. Therefore, we have listed down the perfect child life options that you should choose.
Child insurance is a vital asset that you should own. Rest is in your hand because it’s your child, and we know you will never compromise on quality and let your child suffer.
